Inflationary pressures continue to hit Nigerian businesses, with up to 49% of them reporting price increases for their products and services in September last month.
According to the Stanbic IBTC Purchasing Managers’ Index (PMI) for September, domestic business conditions continued to deteriorate at 49.8, falling below 50 for the third consecutive month.
Input costs for businesses rose at the sharpest pace in six months as output fell in the month, the report said.
The report noted that the weaker naira and higher gasoline prices in the month worsened transportation and logistics costs, which were passed on to consumers.
The report said: “Purchase prices have risen rapidly due to currency depreciation and rising costs of fuel, logistics, materials and transportation. Wage inflation The rate slowed to an 18-month low.The higher costs were then passed on to customers, with nearly 49% of respondents increasing their selling prices in September.
Declining business confidence, business confidence
Although rapid price increases limited customer demand, new orders were reported to have increased for the second consecutive month in September, slightly exceeding August’s increase. Business activity continued to decline slightly during the month, as the improvement in new orders was not sufficient to boost production, marking the third consecutive month of declines in activity.
Output in agriculture and manufacturing increased, but decreased in wholesale and retail trade and services. Employment rose for the fifth straight month, but remained modest as some companies restricted hiring to cut costs.
Business confidence fell in September, hitting its second-lowest level on record, just above the lowest recorded in July. Respondents who were optimistic about the outlook for the year ahead attributed their optimism to expectations for improved business conditions and business expansion plans.
insight
Despite the inflation rate slowing to 32.15 in the past two months of July and August 2024, according to the National Bureau of Statistics (NBS), analysts believe that recent events in the energy and currency sectors will forecast that the inflation rate will rise. The expected rise in inflation is due to the renewed depreciation of the naira and the increase in petrol prices in September by NNPCL.
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